Technologies to make things better.

Big ideas are destroying international development
BY MICHAEL HOBBES
November 18, 2014

In the late ’90s, Michael Kremer, then an economics professor at MIT, was in Kenya working on an NGO project that distributed textbooks to schools in poor rural districts. Around that time, the ratio of children to textbooks in Kenya was 17 to 1. The intervention seemed obvious: Poor villages need textbooks, rich donors have the money to buy them. All we have to do is link them up.

But in the early stages of the project, Kremer convinced the researchers to do it differently. He wanted to know whether giving kids textbooks actually made them better students. So instead of handing out books and making a simple before-and-after comparison, he designed the project like a pharmaceutical trial. He split the schools into groups, gave some of them the “treatment” (i.e., textbooks) and the others nothing. Then he tested everyone, not just the kids who got the books but also the kids who didn’t, to see if his intervention had any effect.

It didn’t. The trial took four years, but it was conclusive: Some of the kids improved academically over that time and some got worse, but the treatment group wasn’t any better off than the control.

Then Kremer tried something else. Maybe the kids weren’t struggling in school because of what was going on in the classroom, but because of what was going on outside of it. So again, Kremer split the schools into groups and spent three years testing and measuring them. This time, the treatment was an actual treatment—medication to eradicate stomach worms. Worm infections affect up to 600 million children around the world, sapping their nutrition and causing, among other things, anemia, stomachaches, and stunting.

Once more, the results were conclusive: The deworming pills made the kids noticeably better off. Absence rates fell by 25 percent, the kids got taller, even their friends and families got healthier. By interrupting the chain of infection, the treatments had reduced worm infections in entire villages. Even more striking, when they tested the same kids nearly a decade later, they had more education and earned higher salaries. The female participants were less likely to be employed in domestic services.

And compared with Kremer’s first trial, deworming was a bargain. Textbooks cost $2 to $3 each. Deworming pills were as little as 49 cents. When Kremer calculated the kids’ bump in lifetime wages compared with the cost of treatment, it was a 60-to-1 ratio.

This is perfect TED Talk stuff: Conventional wisdom called into question, rigorous science triumphing over dogma. As word of Kremer’s study spread, he became part of a growing movement within international development to subject its assumptions to randomized controlled trials.

Dozens of books and articles (and yes, TED Talks) have tracked the rise of the randomistas, as they’ve come to be called. The most prominent of these, and the most fun to read, is Poor Economics, sort of the Principia Mathematica of “obvious” development interventions tested and found wanting.

If someone is chronically malnourished, to pick just one example, you should give them some food, right? Duflo and Banerjee describe dozens of projects finding that, when you subsidize or give away food to poor people, they don’t actually eat more. Instead, they just replace boring foods with more interesting ones and remain, in the statistics at least, “malnourished.”
In Udaipur, India, a survey found that poor people had enough money to increase their food spending by as much as 30 percent, but they chose to spend it on alcohol, tobacco, and festivals instead. Duflo and Banerjee interviewed an out-of-work Indonesian agricultural worker who had been under the food-poverty line for years, but had a TV in his house.
You don’t need a Ph.D. to understand the underlying dynamic here: Cheap food is boring. In many developing countries, Duflo and Banerjee found that even the poorest people could afford more than 2,000 calories of staple foods every day. But given the choice between the fourth bowl of rice in one day and the first cigarette, many people opt for the latter.
Even in countries where development projects worked, where poor people went from hungry to nourished, they weren’t more likely to get a job or make significantly more money. All the appealing metaphors of NGO websites and academo-best-sellers—“the poverty trap,” “the ladder of development”—go limp under the magnifying glass of actually being tested.